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tv   Mad Money  CNBC  November 24, 2009 11:00pm-12:00am EST

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hey, i'm cramer, welcome to mad money. welcome to cray america ka. other people want to make frien friends, i'm just trying to save and make some money. my job is not just to entertain but to educate.
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so call me. all right, it's time to set some things straight about the stock market and the economy. to cut through all the misdirection and misinformation with some cold, hard facts. tonight, consider this a lecture from professor cramer with some crucial insights about how the market really works. and for those of you who caught me on the "today" show this morning, it's a continuation of the argument i was making. this day. that explains not just the dramatic rebound we had, and it was pretty dramatic, the dow was down 91 points, closed down 17, the s&p rallied almost .75%. the larger picture of what's going on with this stock market. here's lesson number one. stocks do not go up idly. ford motor doesn't go to a
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two-year high because ford motor is doing badly. it goes up because it's doing well! ♪ hallelujah >> costco doesn't hit a 52-week high -- >> house of pleasure. >> because people aren't shopping in retail. >> house of pain. >> it goes up because it's doing well. stanley works doesn't take out its 52-week high because home buyers aren't fixing up homes they just bought with low mortgages. the stocks go higher because the companies are -- they're hitting the ball out of the park. lesson number two. when people are buying tools to fix up homes, it tells us they think they can improve the home they just bought. maybe even make it more valuable, gloom and doomers. when people are buying cars, it tells us that they're feeling good about themselves. when people are shopping, it tells us they even have enough
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money to walk out of the house and buy some things. lesson number three. when homes and cars and retail merchandise are selling, when they weren't selling last year, you know what that means? know what it means? it means that things have gotten better. not worse. which leads us to lesson number four. this stock market's not lying its darn fool head off. we went from dow 6,500 to dow 7,500 to dow 8,500 to dow 9,500 to dow 10,470 not because it's a big joke but because stocks reflect the sum of all the houses and cars and retail sales that have occurred. they reflect the fact that there is demand. they reflect the fact that while
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we have every right to be gloomy and worried about our jobs and concerned about finding work, there is still a substantial group of people out there who are doing fine. not great. but fine. and the sum of their purchases is meaningful, not chimerical. and the pin action off those purchases is the higher market. people aren't sitting under rocks, twiddling thumbs, waiting for the sky to fall. they are shopping. they are shipping. they are buying. they are trading up. simply put, they're doing all these things people do when they feel okay. if you tack on the fact that health care reform, the one that's being debated now in the senate, is not going to hurt any of the major companies we recommend here, and judging from the ever high flying wellpoint and bristol-myers, we've been right. add in the fact that our industrials are doing well because of the weak dollar, as emerson, the huge conglomerate, told us this morning. it's something that seems to escape the vast majority of commentators and pundits and managers. you know what that something is?
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logic. the logic of the stock market's advance. you know what's really -- you know what's ridiculous about the use of logic? that i have to defend it as such. that i have to stand here, right here, and tell you that the stock market makes sense. and that the people who don't get it, the myriad people who don't get it, just refuse to take the facts into account. what fact in this how about these. in the last few weeks we have seen data as diverse as u.p.s. saying shipping will be up. nordic american saying tanker rights are higher. ford motor boasting about sales. national association of realtors showing astounding data about housing. analog devices saying things are going through the roof. no, it doesn't matter, right? how let packard last night, doesn't matter, not to these people. not to these bears. take the case of packard. the company wowed us with that great quarter. as i said, there would be a disconnect between what the stuck does and what actually
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happened with the quarter. hewlett packard's stock ran huge in anticipation of that terrific quarter and we got, well, the terrific quarter. because the stock is down today, you know what i heard? i heard things weren't so hot as hewlett. that things must be bad in tech. i suspect, well, because deere went up so much ahead of its quarter, that stock could sell off too, and you'll hear things aren't hot in farming either. recognize such characterizations simply aren't true i can't have you be schmiegel, i'm not listening. tech's selling well except for dell. the farmers in the dell. the farmers are getting more flush because of rising corn prices and it will ultimately take farm equipment higher. like i told you, when you have housing sales going up and pricing stabilizing, you get whirlpool going up, williams and sonoma going up, stanley works going up, home depot going up, and lowe's. it makes sense.
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it's logical. i'm never going to tire of telling you the truth, even as absurd as it sounds, the truth is positive. you have to wonder about the mindset of the business media and the pundits when anyone who's positive has to be on the defense. i'm on the defensive things aren't so horrible. i hope you appreciate the irony of my position. i am mindful the banks have done nothing. they're going to have to issue too many shares to pay back t.a.r.p. i acknowledge oils are stalled. crude is locked between $75 and $80 and there's a ton of oil floating overseas. i recognize we do not have employment growth in this country. people still losing jobs. earlier on the wonderful and fabulous erin burnett show today i created a firestorm by accepting the inevitability of some sort of tax on wall street, even as i abhor the notion of it and i'm against it. but i'm willing to sacrifice if it creates jobs. i just want to report that contrary to everything you hear, there are lots of good things happening. i said that to matt lauer, i'm saying it to you. they're happening in an
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atmosphere where we have been losing jobs hand over fist. while it is true that if we don't start creating jobs we'll see some of this reserving. the stock market is an accurate reflection of what's going on now and what's going to go in the future. bottomed in march, six months ahead of when housing, autos and retail sales started doing better. bottom line, believe it or not stocks actually reflect the condition of the economy. and right now, the stock market's up. and there's a lot of positives. the market is a great forecasting machine. it nailed the bottom in housing, in cars, in retail. why bother pointing it out? this is one of those rare times where it paid to be an optimist. it got you in stocks, not out of them, for the big run. it very well might do the same next year. let's go to john in california, john. >> caller: boo-yah, jim. hey, at over 6% is at&t's dividend yield floor in the creaky zone? a sign the market's skeptical?
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is the fact that the dividend yield is higher than the bond yield a red flag? >> i have thought about this all day today. why? verizon and at&t are finally breaking out to the upside. i have been struggling with the notion, business is really doing well? what's known as enterprise business, corporate business not doing well? no. we heard from the fed chairman and seen that interest rates look like they're going to be low fare a very long time. people want income. if they want income, they want to go to place is where they can pay a dividend and the dividend can go up. the two i know for certain are verizon and at&t. those dividends are safe. chuck in texas. >> caller: howdy, jim. here's a big texas boo-yah! >> i'm giving you a boo-yah right back atcha. you can't see but i've got the hook 'em horns. >> how about them cowboys. any win's a win. >> yeah, how about them cowboys. any win's a win. that's what i was thinking.
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yeah. >> caller: i've been looking into the future. and i see a shortage of fresh water is a major problem. possibly a way to make mad money. what do you think about mueller water products, mwa, as a double play on the water shortage and increasing housing construction? >> i like mueller. i used to be one of the original owners when they spun it out of becker. it was owned by a big fertilizer conglomerate. i think it's a heck of a good idea. i'm doing work with my associate stephanie at actionowners.com on water plays. i think you're in the right spot. i like mueller. peater in carolina, peter. >> calle >> caller: what's shaking? >> i said carolina. do people think it could be south carolina? >> not a chance. >> i felt as much. go ahead. >> caller: earnings guidance for next year has improved, albeit at lower levels, you recently predicted we had seen the market high for the year. the market has continued higher,
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albeit only sheetly. you seem bullish again. have you changed your outlook of the overall market for the rest of the year? >> i think what i've been saying is that i don't think -- i think i've changed my view about how much we could go down. i've been saying 5 to 7. i no longer think we can go down. i think we can go down 3 to 5ed. i think we're bouncing here. we're going to be a ceiling -- it might -- i think there's a rolling bull market. and that it's entirely possible ag can keep going up or that we could see tankers going up. but in general, i think we've pretty much -- for this year it's pretty much done. let's think about 2010, which i think is going to be a pretty good year. remember, stocks do not go up idly. we do have higher consumer confidence. we do have a revival of spending. stocks are telling the truth. it is, as mr. spock would say, logical. "mad money" will be right back. coming up -- cramer pitched two construction stocks against each other. to find out which one has a more
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solid foundation on an all-new "off the charts." plus -- >> starting 5:00 a.m. friday -- >> starting at 4:00 a.m. >> doors open at 3:00 a.m., don't miss it. >> with the busiest shopping day of the year around the corner, what's on cramer's christmas list? jim goes one on one with phillips van housen ceo to see how this holiday season will stack up. and later, stay tuned as we crank up the volume. cramer goes all out as the calls keep coming in. try to keep up. on the high-impact "lightning round."
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boo-yah! now that the global economic
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recovery seems to be for real, stimulus money in this country is finally starting to work its way into the system. and oil prices have recovered from earlier in the year. despite a not so hot day today. i think it might be time to take a hard look again at infrastructure stocks. maybe they can make a comeback. specifically, stocks in the enc, or engineering and construction space, that could have big contract wins as oil and gas companies build out more and more new projects now that oil's stabilized. but we don't want to own just any e & c, engineering and construction, name on this show. we always advocate owning best of breed. and tonight we're going to show you how we figure out exactly which infrastructure name you should buy. what's the process? it's the same one i used back on my old hedge fund where i ran $500 million. we take two stocks and pit them against each other in a claymation style death match where two stocks enter and only one stock leaves. our method puts beyond thunderdome to shame.
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the contenders, fluor, flr for all you home gamers, and jacobs engineering. jec. two high-quality infrastructure companies. for round one we go off the charts. i love to start with the charts. this time i'm using the work of l.a. little. he's my colleague at thestreet.com. he's got his own website, technical analysis today. www.tatoday.com. now, even if you don't buy into chart reading, i urge you to not ignore them. to not ignore the technicals. you can't afford to. because so many other investors do follow them. which is what i stress in "getting back to even," which is the first time i've truly endorsed technical analysis. and how do the charts of these two stocks stack up? little likes fluor based on the technicals. he thinks it's a buy right here and would buy even more if it goes lower. take a look at this monthly chart. little likes to look for what are called swing points. every technician's got his own little thing going.
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these are time-tested patterns that show when a down trend's about to become an up trend or vice versa. he says fluor had a swing point in march. okay? so you look in here, you can see the big swing point. when it declines -- it's declining, and then the stock started to rally. a nice turn there. it took a turn for the worst in august. boom. comes back down. but little now thinks that fluor's reached a similar swing point with the stock retracing the earlier move higher. it's going back up. on fluor's weekly chart, it's a better way to look at what he's talking about. you can see -- just click that. on fluor's weekly you can see the swing back up much better. you can see august swoon and then come back. he thinks this is an ideal buy zone right here. he actually calls it the ideal buy zone. that's why i call it because it's really in english. the high end of which is just about two points lower than where the stock is trading. he's actually being a little different from the other technicians we have. he's saying he wants to buy it as it goes down as opposed to sell it. he thinks this is a good level to buy because the swing points in this zone all have been on higher volume. see, he measures volume.
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that's the volume. see how much higher it is than all the swing points? that indicates the buyers have become interested in these prices and repel the sellers. that props the stock up. little considers the current selling suspect, this little decline here. why? because volume was so low. see the volume? it was really, really low. that's indicative that maybe that sell-off's not telling the truth. you can see in the two ovals, when the two ovals were taken out, and it's increased since then. so remember, what we have is low volume on the sell-off and high volume on the go-up. volume is like a polygraph for technicians. low volume means a move isn't telling the truth and is likely to reverse. that's why little would buy fluor here and buy even more if it goes lower. how about jacobs engineering? just the opposite. he's much less sanguine about this stock's prospects. on the monthly chart jacobs engineering has broken the long-term up trends. look how clear this is. it's going up like this and then boom, takes that out. that is very significant. that's a trend line established
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all the way since march. technicians follow trends. and the fact this positive one has been broken, he thinks is a huge negative. the stock is now banging against its july lows. and look at this. on high volume, the volume expanded there. that move's telling the truth. little thinks this $36 stock could go as low as $30. okay? versus the fluor, which is going to go up. with jacobs' weekly chart, little sees a support zone. got a little support zone here. not a buy zone like fluor but a support zone. meaning while he thinks the stock might not go much lower he doesn't think it's poised to go higher either. at best this is dead money. the stock got crushed on huge volume after jacobs engineering announced a disappointing quarter. there's the truth again. that decline happened on very big volume. that's the truth. that's another swing point. if the volume had been lower like when jacobs hit the support zone in july. okay? see, the volume wasn't very high then. then, well, it would be the exact opposite of what he wants to see. but instead we saw the big explosion in volume. and that means the move's for real and probably will not be
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reversed anytime soon. again, this technician is using volume to explain whether that decline is real, and he says it is real and you have to avoid this. little believes fluor's the one to buy on technicals. when it comes to fundamentals, we're in little's camp. fluor's better than jacobs. in fact, i searched the annals about how to describe this. and i came up with it. i'm willing to quote uber stock guru mariah carey. if fluor could talk, it would say this to jacobs. ♪ you're a mom and pop ♪ i'm a corporation >> you're a mom and pop. i'm a corporation. i mean, how cogent was that? don't you think she was speaking about stocks when she said that? i do. why is fluor better? first off, fluor's a much larger international footprint with about 50% of its revenues coming from outside the u.s. hey, that's great. you've got strong foreign currencies getting translated into weak dollars. it has much more exposure to china! the engine of the global economic recovery.
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just last week fluor announced than alliance with a subsidiary of the china national offshore corporation. where's mao's little red book? i only have the -- much thumbed through. that's c nook. that strengthens the company's offshore capabilities in shallow and deep water. gives the company a better presence in the people's republic. industry conference, recently the company's ceo said several big clients were moving forward again on big projects because oil's up. jacobs engineering simply isn't designed to win these competitive bids. so-called elephant projects. they're called elephants because they're so big. jacobs is more focused on maintaining projects once they've been completed. you go to fluor when you want to expand. you go to jacobs for maintenance. right now it looks like oil and gas companies are about to spend more, and that's expansion. that's why jacobs engineering expects to see pressure on its margins in 2010 while the chart's telling the truth. the highlight of fluor's most recent quarter was its strong margin performance across its oil and gas, industrial and power segments.
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the down side for both of these stocks has been priced in as they both missed the numbers in the most recent quarter. but jacobs' earnings, 5-cent earnings miss pessimistic guidance for 2010 was much more disappointing than fluor's 1-cent miss and in-line guidance for 2010. they both trade on the same levels. fluor 12 times 2011 earnings. jacobs 12 times 2011 earnings. while jacobs has a slightly higher growth rate i think fluor's better positioned for the moment. superior management, better backlog. 28 billion versus 15 billion for jacobs. historically traded at eight times earnings the stock has plenty of up side. especially given the increasing likelihood the company will survive one of the worst economic downturns in a century with little to no earnings degradation. here's the bottom line. the charts according to l.a. little and the fundamentals both say that fluor's going to win this claymation death match with its great global energy and infrastructure buildout. if i were you, i would buy the corporation and sell the mom and pop as fluor is the press
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conference and jacobs, alas, is just a conversation. brian in new jersey. brian. >> caller: ba-ba bobbing my head like yeah yah. i got shaw group at $72 a share, now it's at $29. i see the ceo bought $6.4 million worth of shares on november 5th. should i stick with them or cut my losses? >> i would not sell the stock down here. i would not sell shaw down here. i think it's way too low. i think there are going to be some nuclear reactor contracts. recently shaw beat out fluor. we've had the shaw management on the team. we think that they're really terrific. i think that it would be a crime to sell shaw right here. i want you to hold it. i want to go to lou in connecticut. lou. >> caller: what's up, jim? big ba-ba-ba-boo-yah at you, partner. >> uconn boo-yah back at you. >> caller: i like it. the street obviously liked the take on the acquisition by black & decker of stanley works. >> yes, they did. street liked that. >> caller: little bit on the rise. so my question is, what's your take on the acquisition?
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do you see any pending risks that would prevent the deal from going through? if you were a black & decker shareholder would you take 1.75 shares of stanley stock and hold them or sell off -- >> i always believe that we are not arbitragers and we should take some gain. we found black & decker. now we've got to find the next black and decker. that's how you have to think. i do not want you to stay in black & decker. i want you to ring the register. and let's go find another one. hey, why don't we go to dan in arkansas? razorback territory. dan? >> caller: this is dan holm. i've been watching the natural gas stocks in their prewinter period. natural gas storage is near capacity. of are these stocks' prices determined by weather patterns? i've been following sandridge energy. should i buy it now? >> no, i don't want you -- i think these stocks have had a bit of a run. we want them to pull back. particularly the ones you mentioned. high risk. yes, these stocks are going up in part because people believe we're going to have a really cold winter and we're going to burn off that natural gas. i want you to buy these stocks only if you think the government
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is going to endorse natural gas as a fuel, which i think it may. pictures are worth 1,000 words. the technicals and fundamentals match up. i want you to buy the corporation and sell the mom and pop. fluor is the press conference. jacobs is just a conversation. whatever the heck she meant by that. i think what she really was trying to say, mariah carey was really trying to tell you was buy fluor and sell jacobs. after the break we'll try to confuse you with even more music. >> announcer: coming up -- >> starting 5:00 a.m. friday. >> starting at 4:00 a.m. >> doors open at 3:00 a.m. don't miss it. >> announcer: with the busiest shopping day of the year just around the corner, what's on cramer's christmas list? jim goes one on one with phillips-van heusen ceo manny chirico to see how this holiday season will stack up. plus, the clock is ticking. call cramer at 1-800-743-cnbc to find out how to fire away at cramer on the "lightning round." can he withstand your thunderous onslaught of stocks?
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and later, cramer checks his in box on an all new "mad mail." all coming up on "mad money."
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(announcer) we understand. you need to save money. his is jim. he returns everything. keep your friends close and your receipts closer. and this is his new chevy, what sold you? i can return it. of course, now on top of chevy's 5-year/100,000 mile powertrain warranty, they're offering their 60-day satisfaction guarantee. now, when i buy a new chevy i can return it within 60 days if i'm not thrilled. just one problem... what's that? i'm thrilled. change is good jim. the 60-day satisfaction guarantee. from chevy. yeah. would you like a pony ? yeah ! ( cluck, cluck, cluck ) oh, wowww ! that's fun ! you didn't say i could have a real one. well, you didn't ask. even kids know when it's wrong to hold out on somebody. why don't banks ?
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we're ally, a new bank that alerts you when your money could be working harder and earning more. it's just the right thing to do. like she was drifting away. we wanted to be there for her... to hold on to her. mom's doctor said his symptoms were signs of alzheimer's, a type of dementia, and that prescription aricept could help. it's thought aricept may reduce the breakdown of a vital chemical in the brain. studies showed aricept slows the progression of alzheimer's symptoms. it improves cognition and slows the decline of overall function. (announcer) aricept is well tolerated but not for everyone. people at risk for stomach ulcers or who take certain other medicines should tell their doctors because serious stomach problems such as bleeding, may get worse. some people may experience fainting. some people may have nausea, vomiting, diarrhea, bruising, or not sleep well. some people may have muscle cramps or loss of appetite or may feel tired. in studies these were usually mild and temporary. (woman) if it helps mom be more like herself longer,
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that's everything to us. (announcer) don't wait. talk to your doctor about aricept. the countdown to christmas has begun, and throughout the holidays "mad money" will be looking at what's on the shopping list of the all-powerful consumer. why? because what's selling in the stores is what tells us what stocks we want to put on our stock shopping lists. and tonight i'm adding phillips-van heusen, pvh, to my christmas list. you know, i love it when good stocks go down. i'm not kidding. because believe it or not, stocks actually get cheaper as they go lower. and sometimes you get a chance to buy a piece of merchandise on sale for much less than it should be worth. you accept that at the store, right? well, this is my store. stock store. and that's what happened to phillips-van heusen, pvh.
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one of my favorite apparel companies from way back. you probably recognize it as calvin klein, izod. van housen housen, bass shoes. it's the perfect mix of retail and wholesale. in addition to making products and licensing out its own brands, it also licenses and makes other clothes, makes clothes for other brands. geoffrey beene, kenneth cole, bcbg, michael kors, joseph abboud, among others. if you're wearing a shirt, i mean if you have something on, there's a good chance it was made by pvh. last wednesday pvh reported a blowout quarter, a true blowout quarter, and raised guidance. it should be up huge from where it was before it reported. i mean, that's what should happen, right? $42.29 when the stock reported. it's down 50 cents since then. makes no sense to me. that's right. i still think this stock is cheap enough. even though pvh is just a couple points off its 52-week high, it's up 7.5% since i recommended the stock at $38.88 back on january 28th of 2008. while the s&p 500's down over 18%.
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it did get clocked and has had a huge 197% rebound from its march 6th low. like many stocks. it traded down to $14. pretty crazy. given that pvh is trading at 14 times 2011 earnings estimates with a 14% long-term growth rate i think the stock has plenty of room to run, especially since the share price has yet to reflect the company's fabulous third quarter. see, this wasn't just any old better than expected quarter. it was a mammoth up side surprise. pvh delivered, get this magnitude, $1.08 of earnings per share. over 21% higher than the street's consensus estimates of 89 cents. this was no bogus beat, the kind i warn you about in "getting back to even." it was a real honest to goodness better than expected quarter based on stronger than anticipated sales and earnings. so the next time the bears say that the consumer's tapped out or that retail will have a horrible holiday season, give them pvh. i think this story's only just beginning. but i want confirmation. which is why i'm thrilled to be talk once again to manny
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chirico, the ceo of phillips-van heusen on the show welcome back to "mad money." how have you been? >> thanks, jim, it's nice to be here. >> i am imbued with gloom everywhere. every time i say something positive people tell me i don't have the facts. every time i say there's shopping going on people say give me any evidence. could you please tell people what happened to your stores in the months of october and the first part of november? >> sure. we saw our stores really bounce back very strongly starting in july, in fact. third quarter sales, comp store sales are up about 6%. and that trend has only intensified post october 31st. so in our fourth quarter we're up well over 6% -- >> and tell people where you are so it's not some sort of small scale operation. >> we operate 600 stores around the country and some of the finest outlet centers across america. so between calvin klein, van heusen, izod, and other stores we're performing well at retail. and then our department store channel our brands continue to perform because i think we
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really understand what the value message that the consumer is looking for, particularly in this environment. >> let's talk value message because i am confused by value message. a friend of mine is in the jeans business. sends me some jeans. i put them on. they're unbelievable. turns out they're at walmart. what do you do as a great manufacturer to be able to keep everybody happy? you've got fabulous stuff that you're going to be rolling out at walmart, but you have great stuff at macy's. you have super premium, and you have not premium. how do you keep them straight, and how do you keep your profit margin, how do you keep your customers happy? >> there's a couple of things. we believe in running a portfolio company. we're not a mono brand. we believe that you take those -- your brand, the individual brands, and you target them for specific channels of distribution. high-end department stores if it's calvin klein brand. more family department stores if it's a van heusen or an izod brand. and then our arrow brand is targeted with the mid channel with kohl's and sears. then we sell a significant
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amount of product through walmart, through a number of their private label programs. >> but would i know the difference? >> absolutely. look, we make quality product for every channel of distribution. but you know, piece goods and raw materials are different. calvin will be 100% cotton. it depends on -- >> different materials. >> different materials. >> does it matter what country? are some countries -- if i see cambodia on the label is that necessarily going to be better or worse than vietnam? >> no, some of those countries produce as strong a product as -- we have a basket that's done around the world. so it's not necessarily country of origin. but it's really the raw materials that drive it. >> okay. there are some figures, and i urge everyone to get theirs. there was a morgan stanley global consumer retail conference. it was right after the quarter. it was really extraordinary. you guys gave some great facts and figures. the one that just really just drove me -- i said, how could i not have known this. up against the prior year, you're talking about in the
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shirt business that you expect something approaching a 45% market share of the dress shirt -- how can that be? how can one company have that share? >> in the dress shirt market about two years ago we had about a 35% market share, and over the last two years through september 30th of this year our market share's grown to 45%. >> is there any room? i mean, that's one out of every two shirts is yours. >> just about. in that channel of distribution. the channel of chains and department stores were almost a 50% market share. and in neckwear we have a similar market share that approaches 50%. >> can you do that with slacks one day? can you do it maybe with shoes one day? >> i think in those categories it's a much more fragmented market, and our market share there with our brands is closer to a 12% to 15%. but i think over time we could grow over the next two to three years to close to 20%. >> so superb. in ties. >> in neckwear we are 50% of the u.s. market share. all channels of distribution. >> that's unbelievable.
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>> with about -- >> how did this happen? this is all within five years, isn't it? >> the neckwear acquisition was made last -- two years ago, in 2007. we have layered on from their brands our brands and have been able to really capture more market share. >> you're closing some underperforming stores. what does that mean for the bottom line? >> that will be over time a significant improvement in the bottom line performance at retail. >> and you're negotiating leases right now. down. >> rents are down in all but the a-plus centers throughout america. so we're seeing as leases are renewed anywhere from a 5% to 6% decline in rent expense. >> seems like the most discretionary name you have is fragrance. has fragrance come back? because i think that's a real football cat 54. people don't want to pay for that. >> with the economy and the lack of travel retail, fragrance for the first six months of the year was down 25%. it's a licensed product. >> that's big. >> in the third quarter it was only down 6. and we're projecting 6% to 9% growth in the fourth quarter. >> will you tell me why everyone thinks it's going to be such a bad holiday season if you're
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able with 45% market share, 50% for neckwear, that you're giving us a read right now that is quintessentially the opposite of what i read in the "new york times" and "wall street journal" every single day. >> i can only speak to phillips-van heusen. we don't expect -- >> by you're in macy's, kohl's. you're in walmart. speaking for phillips van housen is speaking for the american consumer. >> well, i think this will be an apparel year without a doubt. i think electronics will be under more pressure. i don't think big ticket items. i think when i look at it i think apparel is sitting in an excellent position and i expect the fourth quarter will be up somewhere overall, somewhere between 2% to 3%. >> that's very different from what people are saying. inventory. you have enough inventory. do you think there's a possibility -- i put out the query that some guys don't have enough inventory in this christmas. >> well, if the issue we're dealing is we don't have enough goods to sell come december 31st, that will be a real quality problem for us to deal with. profitability will be off the charts. and i expect with our inventories down 14% i would
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expect our gross margins to dramatically improve in the fourth quarter. >> manny chirico, you are really unbelievable. congratulations for everything that you've done with pvh and all the people who own the stock. you've done a remarkable job. manny chirico, chairman and ceo of phillips-van heusen. >> thank you. >> coming up try to keep up with cramer as he takes your calls rapid-fire in an all new "lightning round." plus, cramer takes all your questions and gives you the quick-fire responses you so crave. cramericans, we want to hear from you. send jim an e-mail at madmoney.cnbc.com. and stay tuned for some rewarding replies on "mad mail." all coming up on "mad money." l , of your business, when ywhat do you see?uture is the glass half-empty or half-full? well, with ups, you could eliminate warehouses.
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it is time. it is time for the "lightning round" on cramer's "mad money." what's that all about? that's rapid-fire calls one after the other. you say the name of the stock i tell you whether to buy buy buy or sell sell sell. i don't know the callers or stock questions ahead of time. i want to be clear about that. staff prepares the graphics on the fly. we play until we hear this sound, and then the "lightning round" is over. are you ready, skee-daddy? it is time for the "lightning
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round" on cramer's "mad money." i want to start with hillary in louisiana. hillary! >> caller: jimbo. you were expecting a girl. i disappoint. an easy boo-yah from the home of the 10-0 saints. ex-jersey boy. exit 105 and spent the summers at ocean grove. >> oh, you've got to be kidding me. >> caller: i did. >> the previous caller's joining me for dinner at la pastaria. i say we go down and have some ice cream at day's. >> caller: there you go. i digress. royal dutch shell rdsa. 4.5% dividend and reorganizing. >> you've got horse sense. shell is a great stock. why have i not been recommending that? that's my bad. because i own bp for actionalertsplus.com my charitable trust. but royal dutch is really good, too. don in georgia. >> caller: hey, cramer. go phillies. >> go phillies? wrong season. but go ahead. >> caller: i can't wait till baseball season starts up. i'm a baseball fan year round. >> we've got to win the super bowl first. let the eagles win the super bowl, and then we'll deal with the phillies. >> caller: baseball i heart
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year-round. but i'm calling to ask your opinion on bank of america, bac. buy, sell, or hold? >> i've had to downgrade bank of america for my charitable trust. i send out a bulletin every week. i downgraded it. i still own this stock for actionalertsplus.com. why? because they have got to name a ceo, for heaven's sake and they've got to pay back t.a.r.p. and this is starting to get on my nerves. you can't continue to run a bank without a ceo. it doesn't work. memo to the board of bank of america, it's time for you to get serious. let's go to bo in texas. bo knows. bo! >> caller: boo-yah, jim! >> boo-yah, bo. >> caller: i just wanted to tell you, love all your books and what you do for us, man. this is great. >> thank you. i took a lot of heat today in realmoney.com because i said if we have to have a transaction tax i'll live with it if it creates jobs. but you know what, creating jobs is the other mission of this show besides making money. and i can't create them. but i sure do wish i could. what's up?
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>> i've got a mobile internet tsunami stock that's been sideways for i don't know, three months. does it have any up side and do you have an exit price on rfmd? >> we had the ceo on. he's been delivering the numbers. the stock is way too cheap. let me throw in that i think tellabs is too cheap and that ciena has become a gross miscarriage of justice. i reiterate that the tsunami's alive and well. i like rf micro. i want to go to john in virginia. john. >> caller: yo, jim. boo-yah. >> boo-yah, chief. >> caller: what about people's united financial? pbct. >> people united will never be defeated. pbct rocks. that acquisition they made in that financing company yesterday was brilliant. i think people were adapted to an equity offering. the yield is fine. it's one of the stocks i recommend in jim cramer's "getting back to even." people's bank is the most conservative bank in america, and it should be celebrated, not denigrated! hey, how about vinnie in new york? vinnie. >> caller: hey. ba-ba-ba-boo-yah. >> stuttering boo-yah. we haven't had one of those
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lately. >> caller: all right. flextronics. >> oh, boy. flextronics. here's another misunderstood story. flextronics is a contract manufacturer. because somebody came up with some data point that said mother boards aren't being made. everybody selling off flextronics. they should be buying it. demand is strong. did anyone not listen to mark hurd last night on hewlett-packard? business is good, for heaven's sake. veronica in texas. veronica. >> caller: it so pleases me to give you a boo-yah, mr. cramer. >> happy to take one from veronica. >> caller: at age 75 i picked and bought my first stock. in early september i bought decker outdoor. in view of its pullback last week and today i would value your opinion and comment on it. >> first of all, veronica, never too late to get involved and that's terrific. and you probably have a very big gain on deckers outdoors.
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don't be grief. deckers is uggs. and footwear having an unbelievable holiday season as well. we have to see how deckers does in the next three to five weeks. but i think it's going to be good. i urge you with stay in deck. i want to go to brandon in pennsylvania. brandon. >> caller: ba-ba-ba bah bah-boo-yah from san antonio, texas! >> wow. hey, that was high-spirited. that may have been the high-spirited boo-yah of the week to date. go ahead. >> caller: i'm talking about kfa. kk financial. i had that stock for almost a year. they just blew out their last earnings. where do you think this is going? >> i do not share your enthusiasm. i often find i can't make a judgment on these companies. why can't i make a judgment? because i really don't know what they own. i think this one's too hard for me. i do not know what's in it. and i will never know. it reminds me a little bit too much of fortress group, frankly. can i go to matt in new mexico? land of the chairman. matt.
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>> caller: land of the chairman. greetings, and boo-yah to jim cramer. >> you are terrific to join the show, man, you lobo you. >> caller: thanks for taking my call. riverbed technology. rvdb. >> a lot of insider buying in the name. i have historically liked the company. i know they lost some -- you know what? i think this is a historic stock given its growth rate 21 times versus next year. i will stay in riverbed. i think it's actually a decent story. can we go to charlie in pennsylvania, please? charlie. >> caller: hey, jim, from pennsylvania a great big b-o-o-y-a boo-yah. eagle country. >> boo-yah! spells boo-yah. go ahead. first of all, i want to say thank you. i read both your books. you made me a smarter investor. you're a savior to the investor world. thank you so much. >> thank you. i'm trying. i get on people's nerves. i grate on people's nerves. i don't care. i think i'm doing my best i can. >> caller: my stock is jpmorgan, jpm. i've -- >> another miscarriage of
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justice! how can jamie dimon not get his due? how can people not buy this stock? i own it for my charitable trust. i think it's going much higher. bye-bye buy! i think you get a dividend next year. i think jpm is the cheapest bank stock on earth. now, that's a statement. i think we should end the "lightning round" with that statement. but you should stick with cramer. what's on the minds of independent investors? let's ask. when you're trading a stock, every penny counts. i hate when the trade is done and you find out you paid more than the quote price. i want it at the price i expect... or better. td ameritrade's unique trading platform uses multiple market centers to help you find the best possible price. i like those odds. i know they can't flat out promise a better price, but they're always looking for it. they know what matters to me. every online stock trade is always $9.99.
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last week, shawn from kansas asked about htwr and we were stumped. it happens. here are the details. htwr is a medical device company. they make a heart pump called the hvad. it's smaller than current heart pumps which makes it easier for surgeons to insert the implant and reduces recovery time. the device has obtained approval in the eu and looking at getting approved in the u.s. it could take a couple of years though. they compete with thor. thor was going to buy the
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company but the ftc blocked the merger. they could give thor a run for its money but it approves on fda approval. i would treat this as a speculative buy as i'm sure thor is not going to wait to come up with better technologies. now some "mad mail." you know how important i think natural gas is to this nation's future. it's not just about the environment. even when i was speaking to erin burnett today, i've been focusing on taxes, if they can be linked, job creation, i'm in favor of them. although i never want to have higher taxes. job creation is literally the most important thing facing this country. listen to this e-mail we got from aubrey mclendon, the chairman and ceo of chesapeake energy. jim. though he usually calls me wig jim. i guess i'm just jim. please be advised, sir, that to date this year chess peek has hired 1,765 new employees at an average pay north of $60,000 per
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year. thanks for hammering away for natural gas. it is all about jobs, jobs, jobs. when i read that, that was in reaction to some people say -- i'm always asking ceos, are you about to hire? aubrey came in over the transom with that. i tell you something, i am proud, i am proud to read that and to hear that. job creation is everything in this country. all right, here's one from paul in ohio. jim, i have a question about cloud peak energy, cld. you mentioned it's an ipo that's grossly underpriced. i'm wondering if this stock would be worth buying now since it was priced below expectations and has been virtually flat since it began trading. thanks for your help, paul. here's the problem, people say it's going to lose a big contract not that long from now and that's going to hurt it. they have the cleanest coal in the country. coal is not going away. i wish it were, but it isn't. cloud is like buying what warren buffet is shipping when he buys burlington northern. i am in favor of buying cld. "mad money" is back after the break.
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congratulations to j. crew. another blowout quarter. like i say, there's always a bull market somewhere. i promise to find it for you. i'm jim cramer. see you tomorrow. ♪
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